Romania - Functional Review : Romania Competition Council

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Abstract

The European Union is founded on a
competitive market economy unified by commonly agreed rules
and practices. While Romania has joined the Union, its
ability to prosper fully within the common market requires a
strengthened commitment to, and ability to protect, EU
competition principles. Romania's legal and
organizational framework for enhancing competition is
tenuous and the current economic and fiscal crisis puts
recent gains at risk. In particular, Romania's
performance in competition policy still lags behind EU
practice and is characterized by: (i) State-owned
enterprises and government participation still play a
dominant role in many important markets and sectors in
Romania, controlling at least one firm in 14 key sectors of
the economy and exhibiting a market share above 50% in at
least one segment of network industries. (ii) Relatively low
enforcement of competition policy against hard-core cartels
and abusive practices while merger review cases that do not
significantly impose threats to competition account for the
bulk of the workload in the competition area. (iii) Low
staffing for competition enforcement and economic analysis
placing the Romania Competition Council (RCC) at the bottom
of European Union rankings with no internal target deadlines
to track performance. (iv) Active advocacy activities mainly
focus on raising awareness of the importance of competition
law but efforts need to be made to refocus activity on
tackling anticompetitive regulation, expand advocacy to key
groups within the government and implement alternative
advocacy tools. A comprehensive reform program therefore is
required at the national level, as well as within the
Romanian Competition Council (RCC) as the key agency in
guaranteeing healthy competition. Priority actions, further
detailed in this report, include the following: (i) improve
the competitive environment by reducing the dominant role of
the state in several economic sectors, (ii) provide space
for a redoubled RCC focus on competition enforcement
establish a new unit within RCC to target hard core
anti-competitive behavior take immediate steps, within the
principles of the government's unified pay system, to
ensure a level of compensation to core RCC competition staff
commensurate with their responsibilities in front of the
judiciary and private sector.